A new wave of innovation is happening in Southeast Asia, fueled by blockchain technology. A process that originally began to support the cryptocurrency network, blockchains have moved far beyond.

Driving the change in ASEAN, a slew of startups and large companies have begun revolutionising the business ecosystem through blockchain. For example, Indonesian startup BeKind is using blockchain for charity management. And Singapore’s Electrify, by integrating blockchain in the electric power industry, is making it possible for consumers to find power rates that suit their needs.

In 2021, the region’s tech startups operating the decentralised finance (DeFi) ecosystem raised nearly $1 billion in equity funding, and cryptocurrency exchanges accounted for a lion’s share of the deal volume and value. The impact is such that the governments, too, have begun to take note. And are using blockchain technology for a series of functions from agriculture to bonds. The ASEAN region has, slowly, become a centre for innovation in blockchain technology.

Innovation is shaping up

By 2020, Singapore became the new hub for cryptocurrencies and blockchain in Asia. This was after the monetary authority started to form regulations for crypto platforms. It also launched the tokenized version of the Singaporean dollar.

While Singapore is taking the lead, other ASEAN markets are not too far behind.  Take Vietnam for instance. The country incentivises research and development in blockchain technology wherein technology companies get long-term tax breaks. The country is already a hub for technology operations of global hardware majors like Intel and Microsoft, and hence trained talent is readily available. Companies like Vietnam Blockchain Corporation are now building additional resources to go global and also building newer products in areas such as healthcare, especially COVID-19 testing.

Others are catching up too. Indonesia has moved beyond crypto trading and is embracing blockchain projects in segments such as agriculture, gaming, healthcare, and even philanthropy. Similarly, Thailand has expanded the use of blockchain in financial services with banks such as the Bank of Thailand introducing government bonds over blockchains.

In the Philippines, the blockchain association was launched nearly six years ago. This was followed by universities such as Ateneo de Manila setting up a blockchain lab to drive innovation, and the government signing partnerships to use this technology for faster business transactions and cybersecurity.

Time is ripe for further innovations in the areas of trade, financial services, and retail. The case in point is the world’s first blockchain-backed point-of-sale device XPOS that has attracted over $35 million in funding.

Where is the future headed?

Crunchbase estimates that there are 537 companies operating in the blockchain segment alone in the ASEAN region. Some of these include technology startup firm Biconomy which is looking to set up transaction infrastructure for Web 3 applications,  digital wallet MathWallet that supports multiple blockchains, and Conflux Network, which is an open network for decentralised applications and digital assets.

In markets like Indonesia, Vietnam, and the Philippines, many Blockchain platforms including Binance Smart Chain, Ethereum, and Near are being used for transactions.

While the market is nascent and regulatory reforms on blockchain usage are awaited, there is ample opportunity for growth. According to data from Statista, Vietnam, the Philippines, and Thailand ranked third, sixth, and tenth, respectively, in terms of crypto adoption across 55 countries in 2020.

The future will be virtual and ASEAN knows it. At the recent ASEAN Summit, the countries of the region agreed to deepen the commitment to promote affordability, accessibility, and high-quality digital connectivity that will be backed by interoperability. Here, blockchain will be the enabler.

The region as a whole has already committed to exploring cooperation in mutually identified areas such as smart manufacturing, digital finance, and blockchain applications. The transformation is just getting started.